What is this 50% payment on account?
You’ll get a bill when you’ve filed your tax return. If you filed online you can view this:
- when you’ve finished filling in your return (but before you submit it) – in the section ‘View your calculation’
- in your final tax calculation – it can take up to 72 hours after you’ve submitted your return for this to be available in your account
- HM Revenue and Customs (HMRC) will send your bill by post if you did a paper return.
You may need your tax calculation (known as a ‘SA302’), for example if you’re self-employed and applying for a mortgage.
Your bill includes the tax you owe for the last tax year. This is called a ‘balancing payment’ on your bill.
If this is more than £1,000, your bill will usually include an additional payment towards next year’s bill (known as a ‘payment on account’).
If you made payments on account last year
You’ll need to deduct any payments on account you made last year towards this year’s bill to work out what you owe.
Payments on account
‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).
You have to make 2 payments on account every year unless:
- your last Self Assessment tax bill was less than £1,000
- you paid more than 80% of the previous year’s tax you owed, for example through your tax code or because your bank had already deducted interest on your savings
Each payment is half your previous year’s tax bill. Payments are usually due by midnight on 31 January and 31 July.
If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January next year.
Example
Your bill for the 2020 to 2021 tax year is £3,000. You made 2 payments of £900 each (£1,800 in total) on account towards this bill in 2020.
The total tax to pay by midnight on 31 January 2022 is £2,700. This includes:
your ‘balancing payment’ of £1,200 for the 2020 to 2021 tax year (£3,000 minus £1,800)
the first payment on account of £1,500 (half your 2020 to 2021 tax bill) towards your 2021 to 2022 tax bill
You then make a second payment on account of £1,500 on 31 July 2022.
If your tax bill for the 2021 to 2022 tax year is more than £3,000 (the total of your 2 payments on account), you’ll need to make a ‘balancing payment’ by 31 January 2023.
